TCS Q4 results: Net profit jumps 12.2% to ₹13,718 cr, revenue up 9.6%

TCS signed one of its highest total contract values (TCV) in the fourth quarter of FY26 at $12 billion. The company had three mega deals in the quarter

Tata Consultancy Services (TCS) on Thursday kicked off the fourth-quarter earnings season for India’s information technology (IT) players by beating estimates, even as macroeconomic challenges continued to impact the industry. 

The company reported a total contract value (TCV) of $12 billion in the January-March quarter (Q4FY26) and a total order book of $40.7 billion, stepping into FY27 with strong deal wins. 

India’s top IT services company’s net profit rose 12.2 per cent year-on-year (Y-o-Y) to ₹13,718 crore. On a sequential basis, profit after tax increased 28 per cent from ₹10,657 crore. Revenue for the quarter grew 9.6 per cent Y-o-Y to ₹70,698 crore, while sequential growth stood at 5.4 per cent. According to Bloomberg estimates, revenue was expected to be ₹69,019 crore and profit after tax at ₹13,551 crore. The Mumbai-headquartered company, which does not provide forward revenue guidance, said its annualised artificial intelligence (AI) revenue reached $2.3 billion in Q4FY26, up from $1.8 billion in Q3FY26.

 

 

TCS also highlighted strong progress in its Hypervault business, with significant strides by winning customer engagements, land parcel finalisation, and partner relationships.

 

K Krithivasan, chief executive officer and managing director, said in the analyst call that the company was pleased to report its third consecutive quarter of sequential growth, supported by three mega deals and a $12 billion TCV. “We are building the next phase of TCS with conviction, as enterprise increasingly pick partners who can deliver certainty, accountability and outcomes end to end.”

 

When asked about deal momentum and client-specific headwinds, Krithivasan sounded more positive. “By and large, the headwinds that we know are behind us, except for a few that we know or have accounted for.”

 

On the geopolitical development, he said the direct impact so far had been restricted to West Asia and the travel and transportation industry. “We have not seen any major impact in other industries so far...but if this leads to further supply chain disruption or any other secondary issue, then it may have some impact. But nothing at this time,” he added.

 

During Q4, the company expanded its client base across deal sizes, with $100 million clients increasing by two to 66, and $50 million clients rising by nine to 139.

 

Krithivasan explained five key elements for the quarter: continued growth for the third consecutive quarter; expansion across verticals after nearly two years; company-wide salary increments; strong progress in the Hypervault business; and growing momentum in AI services.

 

Hypervault has now partnerships with OpenAI, AMD, and ABB, among others.

 

Krithivasan said the company’s restructuring programme, which impacted about 2 per cent of employees, had been completed and had no effect on the Q4FY26 performance.

 

For the full year, TCS reported revenue of ₹2.67 trillion, up 4.6 per cent YoY. In constant currency terms, revenue declined by 2.4 per cent. Net profit for FY26 stood at ₹49,210 crore, up 1.3 per cent Y-o-Y. The company’s annual revenue touched $30 billion by the end of FY26.

 

TCS continued to see strong growth in AI-driven business. In Q4, annualised AI revenue reached $2.3 billion.

 

Aarthi Subramanian, executive director, president, and chief operating officer, said in the analyst call that FY26 marked a pivotal year for enterprise AI adoption.

 

“For the first time since the advent of GenAI in late 2022, the shift from experimentation to scaled AI deployment showed a marked improvement. AI became a part of every-customer conversation and solutioning, creating a tailwind for enterprise AI adoption,” Subramanian said.

 

She added that the AI revenue was driven by the accelerated deployment of solutions across industries. “We experienced strong-deal momentum across new services in enterprise transformation, digital engineering, and cloud modernisation.”

 

Geographically, the UK led growth in Q4 with a 2.4 per cent quarter-on-quarter (Q-o-Q) increase, followed by North America at 1.4 per cent. Among emerging markets, India grew 1.7 per cent, the Middle East and Africa (MEA) rose 0.4 per cent, while Asia Pacific declined 0.5 per cent. On a Y-o-Y basis, India’s business continued to decline, falling 23 per cent in Q4.

 

Across verticals, all segments reported growth. Banking, financial services, and insurance (BFSI), which is the company’s largest vertical, registered marginal growth of 0.4 per cent Y-o-Y and 0.1 per cent Q-o-Q.

 

Despite benefits from a weaker rupee, operating margins stood at 25.3 per cent. Chief Financial Officer Samir Seksaria said improved realisations driven by value-led delivery and currency movements contributed 40 basis points (bps) and 110 bps, respectively. “We consciously reinvested these tailwinds back into strengthening our capabilities and growth engines,” he said.

 

External consultant costs also increased by 40 bps as the company scaled delivery capacity to meet demand while continuing to build internal capabilities, Seksaria added.